Sales up 27%, net up 71%

GE T&D India, one of the leading manufacturers of transmission and distribution equipments in the country has registered 71% jump in net profit to Rs 46.12 crore for the quarter ended March 2017. Sharp jump in bottom line is largely due to strong operating performance where higher sales (up 27% to Rs 1257.08 crore) and 260 bps expansion in operating profit margin (OPM) to 8.7% powered the operating profit up by 82% to Rs 109.72 crore. Strong operating level performance was backed by lower interest and depreciation cost as well as taxation leading to strong growth at bottom line. But for lower other income, the growth at bottom line would have been much steeper than reported.

• Value of production for the quarter was up by 24% to Rs 1289.93 crore and the value of production was 2.6% and 5.1% higher than their respective sales in quarter ended March 2017 and March 2017. The inventory built up will get liquidated going forward.
• OPM expanded by 260 bps to 8.7% largely do fall in all cost heads. Material cost as proportion to sales net of stocks and excise duty was down by 90 bps to 70.2%, the staff cost and OE was down by 120 bps and 80 bps respectively to 7.4% and 13.5%. Thus gained by higher sales and higher OPM, the operating profit jumped up by 82% to Rs 109.72 crore.
• The other income was down by 68% to Rs 17.67 crore. Thus the growth at PBIDT was restricted to 10% (to Rs 127.39 crore). The interest cost was down by 28% to Rs 34.44 crore. The depreciation was up by 4% to Rs 22.43 crore. The gained by lower interest and depreciation cost as % to OP, the PBT was up by 53% to Rs 70.52 crore.
• The taxation was up by 62% to RS 29.03 crore and thus the PAT was up by 71% to Rs 46.12 crore.

Yearly results

Sales was up by 23% to Rs 4259.60 crore and the operating profit was lower by 56% (to Rs 39.58 crore) with OPM stand contracted by 170 bps to 0.9%. Hit further by lower other income, higher interest cost and depreciation the PBT (before EO) was a loss of Rs 73.27 crore compared to a profit of Rs 55.88 crore in the corresponding previous period. EO income for the quarter and corresponding previous period was nil. The tax was higher by 62% to Rs 71.56 crore and thus the PAT was a loss of Rs 86.66 crore compared to a profit of Rs 86.66 crore in the corresponding previous period.

Management comment

Sunil Wadhwa, Managing Director of GE T&D India Limited, said, ‘Despite extremely challenging market environment the Company's revenue from operations during financial year ended March 31, 2017 increased to INR 42.6 Billion, which is a significant 23 % increase over the previous year. The overall business environment is expected to remain challenging in the financial year 2017-18. However, the company continues to have healthy order book of over INR 81 Billion as of end of March 2017 and therefore is fairly equipped to sustain market pressures.